JUROCK’S Facts by Fax
Jurock Publishing Ltd. #200-1311 Howe Street, Vancouver, B.C. V6Z 2P3 Tel: (604) 464-0808/Fax (604) 683-1707/E-Mail: ozzie@jurock.comWorld Wide Web: http://www.jurock.com/
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Reproduction without permission strictly prohibited
October 31/1996 – November 6/1996
” If three of  us travel together, I shall find two teachers” Confucius

FORECLOSURES ARE UP…a bit
Inside sources say that at least one major bank has seen a sharp increase
in foreclosures this fall (Nanaimo particularly hard hit). Also several
Realtors (joyful with their new listings) saw an increase in property
foreclosures. Most trouble spots currently are investor type owners, who
are now tired of carrying negative cashflows and are giving up. One
investor said this week:” I lost all the money I made in the last 25 years
this year. (Investment) properties that I paid $80,000 for ( on Vancouver
Island) I can’t get what I owe on the mortgage ($67,000). ” However,
according to Shelly Calhoun of Ideal Source (a fine local Foreclosure
Newsletter) foreclosures aren’t up that much (running at about 40-50 per
week) and are mostly in the high ratio and second mortgage area.

WHY WHISTLER IS DOING WELL
Skier demographics are changing. They are getting older (in 1980 they were
aged 32, now they are aged average 35 and up), they have more money and
they want to have the best – and more importantly , they will pay for the
best.  Lifts have to be fast, modern; first class amenities have to be
there and if mother nature doesn’t snow, the resort has to make the snow
too. This is why Whistler or other large resorts capture more and more
well-off skiers, and this is why smaller resorts cannot compete. This trend
will continue. In fact, there were some 1,400 ski areas in 1961, there were
689 in 1984, 526 in 1992 and it is expected the number may shrink to as low
as 350 by the year 2,000. Interestingly enough in a recent survey by the
National Sporting Goods Association, older skiers ( the 35-55 group) ‘ski
participation rates’ are lower but their ‘frequency of visits’ is higher.
Since they are also wealthier, they will spend more money and they want the
quality surroundings. The “Penturbite” skier wants the “schussing” but also
the “sushiing.” That’s why Whistler has done well (that, and a visible cap
on development) and that’s why it will continue to do well. As investors,
we must invest only in those ski resorts, that are well-funded,
professionally managed and operated, and where current and future amenities
will be attractive to that somewhat older, affluent market. While normally
summer slows down in the mountains, Whistler still scorched ahead this
year. While single family lots and homes have outperformed the market, and
while Phase I units have outperformed  Phase II units by a wide margin, all
have done well this year. Well, not quite all. At the Holiday Inn (a Larco
development) re-sales are not getting investors their money back, as they
resell below original purchase price. Said one Realtor this week: ” I won’t
accept listings in that building.” But, generally , everything else sells.
But,  it still pays to be cautious. Particularly, when buying phase II,
hotel units. How realistic are the forecasts for rental income? How
guaranteed -and by whom- are the rental guarantees, more importantly…how
will you collect, if guaranteed returns are not met? Finally, how much
capital is raised in total? When previous hotel investments failed
(Granville Island hotel, Georgian Court hotel, Penticton Lakeside Inn,
Whistler Delta Mountain Hotel and others), it was generally not the
occupancy rate (the hotels attracted the customers well) but the debt load
or a specific deal with the general partner that sank the investors. Have
your accountant review potential investments, get a quality Realtor,
research, but by all means buy.

WHERE WE DISCUSS THE DISCLOSURE FOR THE LAST TIME
The new disclosure requirements on off-shore investments over $100,000 has
created much furore. A veritable storm in the real estate cup. I think, a
media induced storm. It simply makes good copy to shout: “All the
immigrants are leaving.”  However, the hottest immigration nation in the
world is the United States, the hottest. Everybody wants to go there , yet
the U.S. requires its citizens to report all accounts – ALL ACCOUNTS – over
U.S. $10,000. As David Ingram points out in his fine Cen-TaPede newsletter
(call him for a free copy at 649-4755), “…the US taxes its “citizens” on
their worldwide income no matter where they live. Canada only taxes
“residents”…people who are physically present. Therefore, if the Hong
Kong immigrant had gone to the U.S. (instead of Canada) he or she would not
get their world wide income exempted for the first 5 years.” He also points
out that if the new US immigrant-come citizen leaves the US, he’ll be taxed
for the rest of his life, no matter where he lives. Personally, I think the
new rules are distasteful, the reporting requirements and extra bureaucracy
is onerous, but to assume, that everybody will leave the country because of
them simply isn’t true.

Subscribers’ Plots of the Week: 1. WANTED, first class  18 hole GOLF COURSE
, preferably in the lower mainland, but try anywhere in B.C. Up to any
price, but should show a 10% return; 2. Mini-storage (to be built), land
and buildings, Price $600,000; 3. Port Coquitlam Warehouse, 4,200 sq. ft.
Price: $209,000. 3. Fraser Valley, U-Brew Beer and Wine Price $170,000; 4.
Alberni inlet, 6.34 acre waterfront lot, Price: $89,000; 5. BY OWNER MUST
SELLS:, Edmonton- St. Albert, 1 Bdrm condo, Price: $49,500, 6.  Courtenay,
2 Bdrm condo, $66,000; 7. Chemainus, 1 Bedroom, Price $72,000.  Call Liesl
or Lin at 464-0808  (All SPOW’s are for you to evaluate, just look
interesting to us. No guarantees).

PORT KELLS/NORTHWEST LANGLEY INDUSTRIALLY BOOMING
According to Bill and Geoff Hobbs of Royal Lepage, there has been a
tremendous amount of development and land acquisition to the point where
now only a few parcels are left available for direct purchase. Developers
such as the Lark Group, Marinelli Investments as well as Freightliners, GE
Capital Modular, B.C. Rail Properties, Starline Windows and others have
aggressively stepped into this market. This has had a substantial impact on
land values in the Port Kells/Northwest Langley area (see forecast FBF
April 4/1996) Prices for 5 acre sites have risen from approx.. $225,000 to
over $260,000 net of Municipal D.C.C.’s. Langley and central Newton also
have seen a significant uptake of parcels in the 1 – 5 acre plus size. Says
Hobbs:” …we are maintaining our forecasts that we will still see
significant  escalation in development and land prices prior to the end of
the year.” Clearly, new development means new employment, new employment is
good for all kinds of real estate . We tend to agree with the Hobbs’s. For
an excellent summary of properties for sale and sold in that area call Bill
or Geoff Hobbs at 683-3111

THIS WEEK’S HOTLINE: Telephone numbers for all towns in Saskatchewan that
offer building lots, commercial and residential and/or business loans at
minimal cost ($1 or so a lot). Also, 2 properties that “MUST BE SOLD”.

INTERESTED IN THE INTEREST?
Forecasters and economists from the United States and Canada seem evenly
divided on the outlook for interest rates. Some argue, that these
“depression year” rates are here to stay for good , others warn of them
shooting up. This week alone, stories in Barons, the Economist, the
Financial Post and the Wall Street Journal, featured eloquent arguments for
both sides of the question. Cases were made for an increase:  Japan and
Britain to raise rates shortly and for the US to raise rates at the end of
November. Also they were made against an increase: Germany to lower its
rates, the U.S. and Canada to keep its low inflation, low interest rate
environment for years, etc. As we have said several times in our various
publications: Anybody that claims to be able to forecast interest rates
with certainty is either a fool or a liar. No one knows. But we do know,
that we have a 40 year low prime rate and a 41 year low on a 5 year
mortgage term this week. If you are buying, get yourself pre-approved  IN
WRITING this week for as long as possible  (3 – 6 months), if you are
renewing next year some time, do the same. If rates do not rise, roll over
the pre-approval, if they should rise sharply, you can take the penalty and
switch over. But in any case protect yourself.

RESIDENTIAL MORTGAGE  RATES: Please note, that the rates below are the VERY
best available. There may be a fast closing requirement, there may be other
conditions, but these are the lowest rates. Compare these rates to the one
offered to you and if, within a few points, good. But if what you are being
offered is 1% higher…have your feet do the walking.

Best rates
6 mos.    1 yr    2 yr    3 yr    4 yr    5 yr    7 yr    10 yr
High Ratio    4.85    4.60    5.10    5.60    6.00    6.40    6.90    7.69
Conventional    4.85    4.60    5.10    5.60    6.00     6.40    6.90     7.69

Mortgage rates based on a weekly survey of 65 major financial institutions.
The lowest rate posted  may be conditional  to the borrower meeting certain
requirements/conditions

To subscribe to Jurock’s Facts by Fax ($125 per annum) call
683-1111/464-0808 OR fax 683-1707. While the above information is compiled
from sources believed to be reliable, its accuracy cannot be guaranteed.
Any type of investing carries inherent risks; as such we cannot assume
responsibility for any subscriber’s actions or choice of investment.